Correlation Between Telkom Indonesia and AltaGas
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and AltaGas at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Telkom Indonesia and AltaGas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telkom Indonesia Tbk and AltaGas, you can compare the effects of market volatilities on Telkom Indonesia and AltaGas and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Telkom Indonesia with a short position of AltaGas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and AltaGas.
Diversification Opportunities for Telkom Indonesia and AltaGas
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telkom and AltaGas is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas and Telkom Indonesia is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Telkom Indonesia Tbk are associated (or correlated) with AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and AltaGas go up and down completely randomly.
Pair Corralation between Telkom Indonesia and AltaGas
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the AltaGas. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.58 times less risky than AltaGas. The stock trades about -0.1 of its potential returns per unit of risk. The AltaGas is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,097 in AltaGas on August 27, 2024 and sell it today you would earn a total of 419.00 from holding AltaGas or generate 19.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. AltaGas
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| AltaGas |
Telkom Indonesia and AltaGas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and AltaGas
The main advantage of trading using opposite Telkom Indonesia and AltaGas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, AltaGas can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AltaGas will offset losses from the drop in AltaGas' long position.| Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Ribbon Communications | Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Shenandoah Telecommunications Co |
| AltaGas vs. Navigator Holdings | AltaGas vs. Pembina Pipeline Corp | AltaGas vs. Marine Petroleum Trust | AltaGas vs. Dynagas LNG Partners |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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